3 Comments

Summary:

Netbooks are tailor-made for carrier subsidies. They are small, cheap laptops that don’t cost much more (and in some cases less) than the full prices of smartphones. The growing sales numbers for smartphones have seen carrier data plan sales rise in pace and they like that […]

hp-vzNetbooks are tailor-made for carrier subsidies. They are small, cheap laptops that don’t cost much more (and in some cases less) than the full prices of smartphones. The growing sales numbers for smartphones have seen carrier data plan sales rise in pace and they like that a lot. Netbooks provide the natural area for carriers to further the data plan sales and what better way for them to do that than with subsidized pricing of netbooks. AT&T recently started that in the U.S. and Verizon is now reported to be readying subsidized netbooks to work on their data network. Netbooks have been available through carrier subsidies in the EU for a while and 3G data plans have been selling like hotcakes there, so why not in the U.S., too?

I have seen a lot written about subsidized netbooks and how there are two ways to view the phenomenon. One POV deals with the great value a $99 netbook (and as cheap as $50) can bring to consumers, while the other points out that since data plans often cost $60 per month (in the U.S.), over a typical two-year contract that subsidy is not bringing much value to the table. I see merit in both sides of this debate but that’s not what has me concerned about subsidized netbooks going forward.

My biggest concern has to do with support of the subsidized netbooks. Who will be responsible for it? How will customers get problems resolved in a timely fashion? I can see the shadowy outlines of support horror stories-to-be lurking in the 3G netherworld.

I have been using 3G regularly since it was only 2G. I have been paying for a monthly data plan for years and have seen almost everything go wrong under such a plan that can possibly go wrong. I have experienced problems with data-enabled phones that required visits to the carrier’s online tech support staff and others that required a physical trip to the carrier’s shop. I have returned more than one phone due to lack of data connectivity and waited impatiently for the replacement phone to arrive.

I have experienced much the same with 3G modems that plug into laptops. I started with the original PCMCIA cards, graduated to ExpressCards and finally to my current USB modem. I have had to return three of those to the carrier over the years when they refused to continue working. In some cases the problem was obvious — the card wouldn’t even be recognized by any laptop (card fried) — and other times not so obvious as connections just mysteriously stopped working. Good one day, no good the next.

All of these problems were resolved in relatively quick fashion by the carrier (in this case Verizon, but that’s not important). I bought the modems and phones from the carrier on a subsidy and when they failed the carrier stepped in and replaced it. Quick and painless. Why do I have a feeling that’s not going to be the case with subsidized netbooks?

In a fashion, a subsidized netbook belongs to the carrier. Sure you paid for it and it belongs to you but the carrier paid the subsidy so in a way it belongs to them, too. We haven’t had subsidized netbooks around long enough to see how carriers are going to handle them as they start exhibiting problems (and they will). Netbooks are computers, complex devices that work in many different ways than phones. Users can add programs, apply updates and generally do whatever they want during use of the netbook. They can easily expose them to all sorts of malware and viruses, too.

So what are the carriers going to do when the customer calls them up and says, “My netbook won’t connect to the data network anymore”? This will happen; I’ve seen it happen with external modems and have no reason to believe it won’t happen with integrated ones. The support folks are going to go through their designated script and if connectivity isn’t resolved they’re going to ask for the netbook back. Then it’s going to be wiped back to factory condition and returned to the customer, who’s going to be stuck without the programs and data they’ve loaded prior. It’s a much more complicated situation than just giving someone a replacement phone, and customers are not going to be happy with this.

Maybe carriers will contract support from the OEMs or other outside firms. That will add another layer of complexity that customers are not going to handle well. Let’s face it: It’s not just a computer; the subsidized netbook is the computer purchased from Carrier A that is costing them $60 per month and they can’t use it. I predict a lot of unhappy customers in that boat and I hope carriers are getting ready for it.

You’re subscribed! If you like, you can update your settings

  1. I think you will find your answer of how carriers will handle the support of netbooks by looking at how they support smart phones. If an iPhone craps out, does AT&T replace it? Not bloody likely.

  2. iPhone is a unique case as Apple negotiated a support and marketing scheme that differs from the usual. Better to compare to support for smartphones from other manufacturers, unless you think the carriers will change to the iPhone support model.

  3. I imagine they’ll go through their testing and then do one of two things.
    Hardware problem – pull the harddrive and put it in the new netbook. This only works on exchanges between the same model, but shouldn’t be a big problem.
    Software problem – let the customer know the machine will be wiped and all data lost. They won’t support copying the data off though, that’ll be the customers problem.

    Just to avoid all that hassle, I wouldn’t be interested in a subsidized netbook. I’ll stick with the carrier only owning the modem.

    Regarding smartphones, I’m not happy they wipe the data and give me an empty replacement phone. I’ve lost data that way. Activesync is *not* a backup solution. I’ve since moved to a better backup solution from SPB.

Comments have been disabled for this post